During the peak of the Covid-19 crisis in April 2020, the EU reported “the biggest jump in the amount of cash in circulation in the eurozone” since October 2008, proving cash keeps growing. Now, figures from the United States, indicate that American’s have increased their cash withdrawals since the outbreak of the pandemic, conveying a similar message.
The Financial Times, in its piece from 17th July 2020, suggests that Americans are finding comfort in the security of cash during the crisis. Cash is item number five on the US Homeland Security emergency supply list. Empirical data show that in a crisis, the demand for cash typically rises sharply. During economic and political crises, major floods, earthquakes or tornados, almost inevitably more money is printed to meet the rising demand for cash.
Despite strong efforts by the big non-cash payment providers to spread fake news about cash during covid-1 “Americans are […] borrowing what they can and holding on to their cash in a time of uncertainty." Some US citizens obviously believe the neutral medical experts, and the WHO more than those who clearly use Covid-19 to promote their own business interests. The WHO has once again confirmed that cash is safe to use and explicitly states its importance in times of crises:
“Cash use at the till has declined slightly during the pandemic, as consumers accelerate the shift to electronic payments. But just like the period be-fore a natural disaster, there has been a spike in cash withdrawals in the US.”
There are many reasons for the continued trust in real currency; one is certainly its universal usability. As Professor Bill Maurer, Director of the Institute for Money, Technology and Financial Inclusion (IMTFI) and Professor of Anthropology at the University of California, Irvine, explains:
“The recognition that in a pinch I can use cash and it will work with any-body. I don’t need a point of sale terminal. I don’t need to have payment apps PayPal or Venmo or Square. I can just go next door and say ‘Hey, I’m desperate for toilet paper. Here is a five-dollar bill’.”